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Jun Yan

Why the federal government’s coronavirus stimulus package won’t save your business

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The federal government’s stimulus package won’t save your business. 

Increasing the instant asset write-off threshold, as well as some money to help keep staff on board, will be helpful, but as we see a panic-driven economy reeling from uncertainty around COVID-19, these are not measures that will prevent closures.

As a tax incentive, they also rely on businesses having the cashflow upfront to spend money regardless. 

In fact, while these measures are designed to encourage spending and growth to stimulate the economy, this is may not the best time for most SMEs to do so. 

Before considering even trying to take advantage of this package, business owners must rely on their fundamental systems and practices, and crucially, understand how this market will affect their revenue. 

However, first, don’t panic. 

SME owners can’t afford the panicked equivalent of a run on toilet paper. 

To survive you must avoid making panic-based decisions, and at the same time, keep your head out of the sand. 

So take a moment to step back calmly as there will likely be impacts on most businesses, and there are things everyone can do to protect themselves.

Understand your business

All business owners should understand the levers and drivers that keep their companies going. 

If you work in travel, or have a restaurant catering to the Asian tourist market, you would be right to be concerned about the impact the coronavirus will have on your revenue. 

Flight Centre has had to continuously reduce its full-year profit guidance (the amount it tells the stock market it is expected to profit) and managing director Graham Turner has said reducing costs is a priority along with a return to business as usual as soon as possible.

“Within this uncertain environment, our priorities are to reduce costs, while also ensuring that we and our people are ready to capitalise when the steep discounting that is underway across most travel categories starts to gain traction and as the trading cycle rebounds,” Turner said.

However, other industries may be affected differently. If you work in IT services or cyber security, there may be increasing demand for your services as many professionals opt for increased remote working. 

The key is to be aware and try to understand how and why your business may be affected.

If you are affected

In a perfect world, all businesses would hold 12 months of cash to underpin operations, but there are many different arguments and realities. 

I recommend that you understand your business’ cash cycle and have a contingency plan so you can last for at least a quarter (three months) with no revenue. 

Many small business owners take money out of their business straight away, not leaving enough of a buffer on the balance sheet to ride out a downturn in circumstances.

The essential thing to do is to focus on your business fundamentals.

Make sure you keep doing business

This sounds basic, but whatever your business does, keep doing it. Don’t get stuck in the hype and act irrationally. 

Don’t scapegoat coronavirus

It is important to budget correctly, analyse variance and understand if any issues are actually being caused directly or indirectly by the coronavirus.

It is sometimes easy to find a scapegoat when things are going wrong, but what you might find is that there could be underlying problems within your business. 

Strong businesses will be able to withstand down periods in a market.

Focus on pipeline and growth

If the current state of the economy could affect your pipeline, then you will need to pay more attention to it. If you’re likely to win less business, you might need to work even harder on attracting it. 

If there’s a dramatic impact on business, do you have a balance sheet strong enough to withstand it? And how long can you withstand it for?

Communicate with staff

Uncertainty is what’s caused the great toilet paper panic. 

Don’t let that happen in your business. Be open, clear and communicate with your team about any extraordinary measure you’ll need to take. 

You want to give confidence that any measures are short term. It is unlikely this pandemic and associated uncertainty will go on forever. We need to be patient in the interim, and still be ready to ramp up back to business as usual. 

If your revenue will be hit

In a downturn, your revenue might take a hit. If that is likely to happen to you, be realistic. 

Be aware of what is happening, and pay attention to who is impacted by the coronavirus, what the World Health Organisation’s advice is and even what broader public officials are saying. 

As an example, with public events such as the Melbourne Grand Prix being cancelled, more are likely to follow. That means if your business is in hospitality, travel and even retail, you will see an impact. 

The Grand Prix was cancelled last minute, but business owners should begin planning contingencies for other major events in the coming months. 

Emergency measures

If you really run into cashflow trouble, you may need to take some action. 

Leading from the front, Qantas’s CEO Alan Joyce is taking a $3.3 million pay cut as the airline has slashed international flights by 90% for the rest of the financial year. 

Flight Centre has taken action to close stores and where possible put staff on leave without pay to avoid having to cut jobs. 

If you are across the fundamentals, have taken appropriate measures to cut costs, and understand your budget variances, all this leads to a better conversation with financiers if it comes down to the crunch. 

Financial health check: Why you can’t manage your business by your bank account

By Business Advice, Uncategorized No Comments


It’s the start of the year, and in these early days, it’s natural to take a look at how your business is going financially. The unfortunate thing is that this step is often where SMEs make their biggest mistake. They look straight at their bank account and that’s it. I’m guilty of this too, and in Ravit Insights’s dealings with a wide range of companies, the same holds true for other owners.

We too frequently take the shortcut of looking at how much cash is in the bank to guide key decisions. When running a business it can be very easy to get caught up in the day-to-day operations and looking for shortcuts like this one can land you in trouble.

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3 years on…

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Happy new year and welcome to 2020!

Before I start, I’d like to draw attention to the fact that while most of us are celebrating the new year, the country’s serious bush fire crisis is ongoing. I wish all the firefighters and other emergency services well and thank you all for your service. We encourage everyone to join us in a show of support by donating, no matter how big or small, to help support and provide some relief to these brave volunteers.

Click here to make a donation to the CFA for all their hard work and bravery

2019 in review…

When I started this venture back in 2017, I set out on a new challenge, and it was an exciting time.

Three years on, the excitement remains, but for vastly different reasons. In the three years since, there has been significant changes to the business with lots of learning and experiences – both highs and lows.

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’tis the season – so is your business prepared?

By Business Advice No Comments

For most Australians December is either a time where your foot is flat to the floor, or you’re winding down and focusing on the next end of year lunch.

Knowing which camp you fit into is vital for all Australian small and medium businesses.

For the gelato store near St Kilda beach in Melbourne a warm summer with more tourists and beach days can make their business profitable for the entire year, even through the dark days of winter. The same goes for the retail stores, which despite declining economic environment, often rely on a very busy Christmas to buoy their annual turnover.

However, for others, like consulting firms or those in financial services, December signals a time to wind down. Often businesses will really slow down over late December and early January, with some taking a much needed break.

Whichever camp, or another, you’re in, it is important to understand how seasonality will affect you.

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Why growth is bad for your bank balance

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Growth is good. But it comes with big challenges.

With the hype in the startup world, growth, in the form of a mythical hockey stick, has become one of the much vaunted and sought after business metrics.

As we frequently see reported globally, the highest growth and highest valued technology startups are rarely profit or cash flow positive – think Uber and WeWork.

What that means for the majority of business owners, is that balancing growth with cash flow or capital needs is one of the key operational challenges.

It’s probably what you’ll lose sleep over (if this is you, take a breath and fill out our growth early warning signs check list).

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Don’t listen to billionaires — they don’t understand your business

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When we started Ravit Insights, we followed advice from billionaires and industry experts by putting ourselves in front of potential clients and this is what it got us: radio silence. The truth is, billionaires and experts don’t have a full understanding of our company, and they don’t have a full view of yours either — despite what they would have you believe on LinkedIn and Instagram.

They got to their high level of success over a long period of time, and they’ve probably forgotten half of what they’ve done to get there.

The mistake we made was taking their words at face value rather than thinking for ourselves. Following their advice, we priced our solution too high, and we didn’t go anywhere. Instead, we needed to educate ourselves and find people who truly understood what we were trying to achieve and at what scale and pace.

We could have had a lot more clients if we had ignored the experts and trusted our gut straight away. This is the advice we wished we had been given two years ago.

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